SCHEDULE: Starboard Value Cuts Healthcare Realty Stake Below 5%

Activist investor Starboard Value LP and its affiliates have reduced their beneficial ownership in Healthcare Realty Trust Inc. to below 5% through recent share sales.

Summary

• Starboard Value LP and its affiliates filed an Amendment No. 2 to their Schedule 13D regarding Healthcare Realty Trust Inc.
• As of September 23, 2025, the reporting persons ceased to beneficially own more than 5% of Healthcare Realty Trust Inc.'s Class A Common Stock.
• The Starboard group's aggregate beneficial ownership is now 14,492,496 shares, representing 4.1% of the 351,606,597 outstanding shares as of July 25, 2025.
• Starboard V&O Fund exercised forward purchase contracts with Bank of America, acquiring 4,826,156 shares, and is no longer a party to these contracts.
• Significant sales of Class A Common Stock were executed by various Starboard entities between July 31, 2025, and September 24, 2025.
• Starboard V&O Fund sold a total of 2,353,234 shares at prices ranging from $15.3570 to $17.9090.
• Starboard S LLC sold a total of 204,551 shares at prices ranging from $15.3570 to $17.9090.
• Starboard L Master sold a total of 88,935 shares at prices ranging from $15.3570 to $17.9090.
• Starboard X Master Fund Ltd sold a total of 526,725 shares at prices ranging from $15.3570 to $17.9090.
• Shares held in the Starboard Value LP Account sold a total of 259,921 shares at prices ranging from $15.3570 to $17.9090.
• The aggregate purchase price for the 8,007,983 shares beneficially owned by Starboard V&O Fund is approximately $131,335,340.
• The aggregate purchase price for the 1,158,671 shares beneficially owned by Starboard S LLC is approximately $19,016,386.
• The aggregate purchase price for the 485,662 shares beneficially owned by Starboard L Master is approximately $7,963,596.
• The aggregate purchase price for the 2,976,770 shares beneficially owned by Starboard X Master is approximately $48,949,159.
• The aggregate purchase price for the 1,863,410 shares held in the Starboard Value LP Account is approximately $32,170,068.

Sentiment

Score: 3

Explanation: The sentiment is negative due to a significant reduction in stake by a prominent activist investor, Starboard Value. This typically signals a lack of conviction or a strategic exit, which can be perceived negatively by the market. While the exercise of forward contracts is a technical conversion, the subsequent sales and overall reduction below 5% are the dominant factors.

Positives

• Starboard V&O Fund successfully exercised its forward purchase contracts, converting derivative positions into direct equity holdings.

Negatives

• Starboard Value LP, a known activist investor, significantly reduced its stake in Healthcare Realty Trust Inc., falling below the 5% beneficial ownership threshold, which could signal a loss of confidence or a shift in investment strategy.
• The substantial share sales by Starboard entities could exert downward pressure on the stock price or indicate a lack of perceived upside by a major institutional investor.

Risks

• Reduced activist investor oversight: With Starboard Value's reduced stake, Healthcare Realty Trust Inc. may face less pressure from a prominent activist investor, potentially impacting corporate governance or strategic initiatives aimed at shareholder value.
• Negative investor sentiment: The divestment by a major activist fund could negatively influence market perception and investor confidence in Healthcare Realty Trust Inc.'s future performance.

Future Outlook

The filing does not contain specific forward-looking statements or guidance from Healthcare Realty Trust Inc. It primarily details changes in beneficial ownership by an activist investor.

Industry Context

The reduction of a significant stake by an activist investor like Starboard Value in a healthcare REIT could be interpreted in several ways within the industry. It might suggest that Starboard believes its activist objectives have been met, or that the company's valuation no longer presents a compelling opportunity relative to other investments in the sector. This move could lead to reduced pressure on Healthcare Realty Trust's management to implement specific strategic changes, potentially allowing them more autonomy but also removing a strong external voice for shareholder value creation.

Stakeholder Impact

• Shareholders: May experience negative sentiment and potential downward pressure on share price due to the activist investor's divestment. Reduced activist oversight could also mean less pressure for immediate shareholder value initiatives.
• Management: May have more autonomy without the direct pressure of a large activist shareholder, but could also face increased scrutiny from other investors regarding strategic direction and performance.

Next Steps

• Healthcare Realty Trust Inc. management may face questions from investors regarding Starboard Value's reduced stake and its implications for future strategic direction.
• Investors will monitor Healthcare Realty Trust Inc.'s stock performance and any subsequent disclosures for further insights into the company's operational and financial health.

Key Dates

Recommendation

The significant reduction in beneficial ownership by Starboard Value LP, a well-known activist investor, to below 5% is a strong negative signal. Activist investors typically divest when they believe their objectives have been met, or more commonly, when they no longer see compelling upside or believe the company's strategy is not aligning with their value creation goals. This move suggests a loss of confidence from a sophisticated investor, which could lead to further downward pressure on the stock and a re-evaluation of the company's prospects by other institutional investors. While not a direct 'sell' signal on the company's fundamentals, the activist exit implies a reduced likelihood of near-term catalysts or significant strategic improvements driven by external pressure, making the stock less attractive.

Keywords

Healthcare Realty Trust, HR, Starboard Value, Schedule 13D/A, Activist Investor, Share Sales, Beneficial Ownership, Real Estate Investment Trust, REIT, Healthcare REIT